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Abstract
Forty billion dollars of ODA over the past two decades has reduced destitution in post-socialist and post-conflict Ethiopia. It has also boosted the technocratic capacity of exclusionary state institutions, while doubly enfeebling the fledgling private sector and independent political and civic organisations. This aid–institution paradox is a product of an alignment of donor–recipient strategic interests. The five major donors pursued geopolitical and poverty reduction objectives; and the narrowly based ruling elite sought total capture of the state, ownership of the development agenda and use of pro-poor growth to leverage large aid inflows and to seek domestic political legitimacy. By coupling poverty reduction with adequate space for inclusive market, civic and political engagement, a farsighted coalition of donors could have complemented capacity building with the promotion of state resilience. Scaled-up aid can still be delivered, as in Eastern Europe, conditional on meaningful mutual accountability and the rule of law.
Acknowledgements
The author is grateful for helpful comments from Rachel Gisselquist and two anonymous referees.
Notes
1. Addison, “Do Donors Matter?”; Moss et al., An Aid–Institutions Paradox?; Bräutigam and Knack “Foreign Aid, Institutions, and Governance”; and Andrews, The Limits of Institutional Reform.
2. EU, Evaluation, 65.
3. Grindle, Good Enough Governance Revisited; North et al., Violence and Social Orders; Acemoglu and Robinson, Why Nations Fail; and Fukuyama, Political Order and Political Decay.
4. Andrews, The Limits of Institutional Reform; and Booth, “Aid, Institutions and Governance.”
5. Tarrow, “The Strategy of Paired Comparison.”
6. Rodrik, “Notes on the Ethiopian Economic Situation”; and IMF, The Federal Democratic Republic of Ethiopia.
7. Abegaz, “Aid and Reform in Ethiopia”; and Clapham, “The Challenge of Democratization.”
8. Vaughan, “Revolutionary Democratic State-building”; Vaughan and Gebremichael, Rethinking Business and Politics; and Zenawi, “State and Markets.”
9. Legesse, YeMeles Tirufatoch balebet alba ketema.
10. Turton, “Introduction,” 8–14.
11. Selassie, “Ethnic Federalism”; Turton, “Introduction”, and GOE, “Constitution of the Federal Republic of Ethiopia.”
12. See, for example, Amnesty International, “Ethiopia”; HRW, Development without Freedom; US Department of State, Ethiopia; EU Election Observation Mission, Ethiopia; and RSF, “Ethiopian Government’s Witchhunt.” See also the particularly detailed reports of the Ethiopian Human Rights Council, at www.ehrco.org.
13. Amnesty International, “Ethiopia.”
14. US Department of State, Ethiopia.
15. GOE, Proclamation to Provide for the Registration and Regulation of Charities; GOE, Proclamation on Anti-terrorism; HRW, Development without Freedom; Amnesty International, “Ethiopia”; and RSF, “Ethiopian Government’s Witchhunt.”
16. Oakland Institute, We say the Land is not Yours.
17. Zenawi, “State and Markets”; Vaughan, “Revolutionary Democratic State-building”; Abegaz, Aid, Accountability and Institution-building; and World Bank, 3rd Ethiopia Economic Update.
18. Furtado and Smith, Ethiopia; World Bank, Ethiopia: Country Assistance Evaluation; World Bank, Country Partnership Strategy; and EU, Evaluation.
19. GOE, Ethiopia: Sustainable Development; GOE, Ethiopia: A Plan; and GOE, Ethiopia: Growth and Transformation Plan.
20. AfDB, Federal Democratic Repubic of Ethiopia.
21. World Bank, Ethiopia: Country Assistance Programme.
22. World Bank, Country Partnership Strategy for Ethiopia.
23. EU, Ethiopia; and EU, Partnership Strategy for Ethiopia.
24. Carbone, “Better Aid, Less Ownership”; and EU, Evaluation.
25. Del Biondo and Orbie, “The European Commission’s Implementation of Budget Support.”
26. DFID, Ethiopia; and DFID, Business Case.
27. Barnett et al., Country Programme Evaluation; and DfID, Country Programme Evaluation.
28. USAID, Ethiopia.
29. DAG, A Profile of Development Partners in Ethiopia.
30. Plummer, Diagnosing Corruption in Ethiopia.
31. Vaughan and Gebremichael, Rethinking Business and Politics in Ethiopia; and Abegaz, Aid, Accountability and Institution-building.
32. AfDB and GFI, Illicit Financial Flows from Africa.
33. Barnett et al., Country Programme Evaluation; AfDB, Federal Democratic Republic of Ethiopia; and EU, Evaluation.
34. Barnett, et al., Country Programme Evaluation; and EU, Evaluation.
35. Khan et al., Improving Basic Services.
36. World Bank, World Development Report.
37. There are many methodological and interpretational concerns with Khan et al., Improving Basic Services. With respect to effectiveness, the authors note that 97% of the funds are used to cover the salaries of health workers, agricultural extension workers and teachers. This suggests that there is a problem of inference from intermediate inputs to final outcomes. Many caveats are also noted but not duly reflected in the conclusions. There is, for example, a serious omitted variable bias since the outcomes are also affected by capital spending and non-recurrent expenditures. Furthermore, the claim about the efficacy of the new decentralisation cannot be confidently made without considering the counterfactual of a similarly pro-poor Derg regime without decentralisation or local hiring of staff. The claims regarding the deepening of accountability to citizens are also surprisingly marred by dubious presumptions. First, the evaluation of the direct route of accountability linking citizens with providers (such as transparent budgets, community and citizen report and score cards, grievance procedures, etc.) is being piloted in only half of the woredas. Second, the report bafflingly ignores the fact that the ‘service providers’ themselves are government entities in a subnational environment bereft of independent citizen organizations or providers.
38. Acemoglu and Robinson, Why Nations Fail; and Andrews, The Limits of Institutional Reform.
39. “Britain pulls back $4.5bn Development Aid”; and Oakland Institute, We say the Land is not Yours.
40. Nega, “Letter from the Ethiopian Gulag.”
41. Ethiopia’s dependence on ODA grants and concessional loans, which comprised half its foreign exchange sources in the 1990s, declined to about a third in the 2000s, as exports and remittances each matched the volume of net aid inflows. Over the past five years FDI and non-concessional loans (mostly from China) have increased substantially – the latter standing at $5.5 billion or half of total external debt in 2013. See World Bank, 3rd Ethiopia Economic Update.